The AI Supercycle’s 10 Layers: Where the Next 5x–10x (and 100x) Winners Are Being Built Right Now

Outlier Capital · Outlier Capital · May 27, 2026 at 12:45 · ⏱ 7 min read  | Read on Substack ↗
Summary
The AI supercycle is rotating through 10 infrastructure layers beyond chips, with massive capital flows into memory, photonics, networking, compute, power, cooling, materials, and physical AI. Outlier Capital presents specific stock picks for each layer, arguing that the winners will be the companies owning the physical rails of AI infrastructure, not just the models.
  • Hyperscalers are guiding toward $650B+ in AI capex in 2026, nearly double 2025, with cumulative spend projected to exceed $7T by 2031.
  • The post-GPU bottleneck is memory (HBM/DRAM/NAND), with order books sold out into 2028.
  • The 1.6T optics transition is critical; copper cannot scale, and lead times are 20+ weeks with inventory gone through 2026.
  • Power generation (especially SMRs) is the #1 bottleneck of 2026, as data centers will consume more power in the next 5 years than entire countries.
  • Liquid/immersion cooling is now table stakes for 100-500+ kW racks, with Vertiv orders up 252% YoY.
  • The author outlines a rotation sequence: semis → memory/photonics → compute → power/cooling → materials → physical AI, and provides specific stock picks for each of the 10 layers.
Read time 7 min
Length 7,107 chars
Category finance
Ideas
Outlier Capital Substack author, Outlier Capital
Hammond Power Solutions (HPS.A) provides transformers and power quality solutions for AI data centers, benefiting from 5-year lead times in grid equipment.
Outlier Capital Substack author, Outlier Capital
AMD is gaining share in AI accelerators with its MI400-series GPUs and CPUs, supported by full-stack software momentum, as hyperscalers seek higher TCO alternatives to NVIDIA.
Outlier Capital Substack author, Outlier Capital
Credo Technology provides high-speed connectivity silicon that is seeing explosive demand from the adoption of 800G and 1.6T networking in AI data centers.
Outlier Capital Substack author, Outlier Capital
Western Digital provides enterprise SSDs and NAND storage that scale directly with AI data lake growth, a key beneficiary of the memory/storage bottleneck.
Outlier Capital Substack author, Outlier Capital
Lightwave Logic (LWLG) develops an electro-optic polymer platform for ultra-high-speed, low-power optical interconnects, critical for the 1.6T optics transition.
Outlier Capital Substack author, Outlier Capital
Sivers Semiconductors (SIVE) is a photonics leader providing lasers and optical components for AI data center interconnects, riding the 1.6T optics wave.
Outlier Capital Substack author, Outlier Capital
Marvell is a custom ASIC leader for hyperscalers (AWS, Microsoft) and has a photonic fabric via Celestial AI, while also benefiting from networking silicon for AI clusters.
Outlier Capital Substack author, Outlier Capital
Sandisk (SNDK) is a NAND flash leader with high gross margins and multi-year AI backlogs, benefiting from massive memory demand for AI training and inference.
Outlier Capital Substack author, Outlier Capital
Everspin's MRAM offers ultra-low-power, high-performance memory for AI edge applications, positioned as a small-cap asymmetric play in the memory layer.
Outlier Capital Substack author, Outlier Capital
POET Technologies offers hybrid silicon photonics for optical engines, a key technology for AI data center interconnects as copper reaches limits.
Outlier Capital Substack author, Outlier Capital
Arista Networks is dominant in hyperscaler AI networking with record deferred revenue, benefiting from the non-negotiable 800G/1.6T Ethernet fabric buildout.
Outlier Capital Substack author, Outlier Capital
CoreWeave (CRWV) is a pure-play AI cloud provider offering a hyperscaler alternative, undergoing massive cluster buildout as capital flows into compute infrastructure.
Outlier Capital Substack author, Outlier Capital
Astera Labs (ALAB) provides AI fabric switches and high-speed interconnects, a pure-play small-cap momentum name riding the 800G/1.6T networking wave.
Outlier Capital Substack author, Outlier Capital
Brunner (BRUN) is a specialized AI cloud provider offering high-performance bare-metal GPU infrastructure for massive AI and HPC workloads.
Outlier Capital Substack author, Outlier Capital
TSSI (TSSI) is a leading AI data center systems integrator focused on rack integration, deployment, and HPC infrastructure, benefiting from the infrastructure buildout.
Outlier Capital Substack author, Outlier Capital
NuScale Power (SMR) has the only NRC-approved SMR design, providing a regulatory moat with first deployments expected mid-decade.
Outlier Capital Substack author, Outlier Capital
Fluence Energy (FLNC) is a battery storage leader providing grid stability and data-center backup solutions, critical for power delivery bottlenecks.
Outlier Capital Substack author, Outlier Capital
Vertiv (VRT) has seen orders surge 252% YoY, is co-developing with NVIDIA on Rubin, and has aggressive 2026 guidance, making it a pure-play thermal management beneficiary.
Outlier Capital Substack author, Outlier Capital
Oklo is a Sam Altman-backed nuclear startup with a large pipeline, positioned as a pre-revenue asymmetric bet on SMRs, the #1 bottleneck of 2026.
Outlier Capital Substack author, Outlier Capital
Nano Nuclear Energy (NNE) develops portable microreactor technology, a pre-revenue moonshot with huge deployment potential for data center power.
Outlier Capital Substack author, Outlier Capital
American Superconductor (AMSC) supplies superconductors and power electronics for grid and data center applications, capitalizing on grid modernization.
Outlier Capital Substack author, Outlier Capital
Amphenol (APH) provides high-performance interconnects and thermal solutions, benefiting from the need to cool 100-500+ kW racks in AI data centers.
Outlier Capital Substack author, Outlier Capital
EMCOR Group (EME) provides modular construction and electrical/cooling skids for data centers, benefiting from the liquid/immersion cooling table stakes trend.
Outlier Capital Substack author, Outlier Capital
U.S. Rare Earths (USAR) is a domestic leader benefiting from reshoring trends and robotics demand for critical minerals.
Outlier Capital Substack author, Outlier Capital
MP Materials (MP) is a domestic rare earth champion, benefiting from structurally tight supply for cables, magnets, and robots in the AI physical infrastructure stack.
Outlier Capital Substack author, Outlier Capital
Energy Fuels (UUUU) offers a dual play on uranium and rare earths, benefiting from demand for both nuclear fuel and specialty materials.
Outlier Capital Substack author, Outlier Capital
Ouster (OUST) is a LiDAR leader providing perception for robotics, autonomy, and physical AI, a key enabler of the physical world layer.
Outlier Capital Substack author, Outlier Capital
Intuitive Machines (LUNR) provides space connectivity and lunar/edge AI infrastructure, a play on the final layer where intelligence enters the physical world.
Outlier Capital Substack author, Outlier Capital
Ondas Holdings (ONDS) develops autonomous drones, counter-UAS defense systems, and wireless networks for defense, rail, and industrial sectors, a play on physical AI deployment.
More from Outlier Capital

This newsletter, published May 27, 2026, features Outlier Capital discussing HPS.A, AMD, CRDO, WDC, LWLG, SIVE, MRVL, SNDK, MRAM, POET, ANET, CRWV, ALAB, BRUN, TSSI, SMR, FLNC, VRT, OKLO, NNE, AMSC, APH, EME, USAR, MP, UUUU, OUST, LUNR, ONDS. 29 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Outlier Capital  · Tickers: HPS.A, AMD, CRDO, WDC, LWLG, SIVE, MRVL, SNDK, MRAM, POET, ANET, CRWV, ALAB, BRUN, TSSI, SMR, FLNC, VRT, OKLO, NNE, AMSC, APH, EME, USAR, MP, UUUU, OUST, LUNR, ONDS